07.06.2006 Business & Finance

Taxation In Ghana — Principles, Practice And Planning

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Taxation In Ghana — Principles, Practice And Planning
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The South African international reggae star, Lucky Dube, was right when he titled his song, “Mr Taxman.” In it, he sought to educate people about the importance of taxes vis-à-vis national and world development.

The musician draws attention to the fact that taxpayers' monies are being abused the world over.

In this part of the world, issues relating to taxes are perceived as something for the government and tax collection agencies. Members of the public shy away from their responsibility of paying taxes because of the wrong notion that taxes are punitive and a burden on them. Lack of education on the tax systems and administration partly accounts for this.

Several instances can be cited to support this. Four persons died in Ghana over the introduction and impact of the Value Added Tax (VAT) in 1995. Recently, several demonstrations organised by opposition politicians rocked the country over the tax component of the petroleum price increases.

Publications about tax evasions and fraud by individuals and corporate institutions abound. While some of these are committed unconsciously as a result of lack of knowledge or education, others are executed intentionally to benefit those involved.

Ghana's tax laws, like those of other countries, have undergone several changes and repeals to meet the needs of modern tax administration, governance and development needs. The Income Tax Decree, 1975 (SMCD 5), Value Added Tax, 1998 (Act 546) and others are clear examples.

The country, according to experts and tax analysts, has many wonderful statutes but little education has been done on them, thus rendering their existence and implementation ineffective and inefficient. Act 671 (VAT Amendment), 2004, Taxpayers Identification Numbering System Act, Customs and Excise (Duties and Other Taxes), Act 565, 1999 are among the best in the world.

Ali-Nakyea Abdallah's book, “Taxation In Ghana - Principles, Practice and Planning,” authored with the aim of making taxation understandable to all could not have come at a more opportune time than the current dispensation, where education and knowledge of the rights and responsibilities of the people are paramount.

Organised into 22 chapters and divided into four parts, the book gives clear and comprehensive treatment of standard topics that form the basis of traditional taxation courses' outlines or syllabi from the basic, professional, masters and other levels as well as the newly introduced topics in modern taxation which meet international standards.

Current topics such as macroeconomic framework for national income analysis, alternative sources of revenue to government, analysis of public debts, their causes and consequences, intergovernmental fiscal relations, tax planning and strategies for reducing taxes, (a chapter in the book beneficial to the business community and tax practitioners) are covered extensively by the book.

A comprehensive research on the introduction of taxes in Ghana and related issues, responsibilities, benefits and punishment regarding income tax returns, income tax administration, capital allowance, capital gains tax, gift tax, taxation of insurance business, double taxation and management of revenue agencies are contained in the book.

The author presents factual and hypothetical scenarios as well as elaboration on the above topics and taxes on natural resources, rental income, taxation of partnerships and partners, net worth, withholding taxes, Customs, Excise and Preventive Service and VAT.

The author, with more than 13 years' experience in taxation and finance, lecturing and consultancy, shares his experiences and knowledge with students, tax practitioners, lecturers, the media, the business community and indeed all readers.

The book is relevant as a reference document for tax administrators, revenue-collecting agencies, entrepreneurs, individuals, government functionaries, indeed all Ghanaians.

The endorsement or adoption of the book for serious academic, office or personal use may help deepen knowledge of the significance of taxes, revenue mobilisation and reduce the numerous cases of tax evasion and fraud.

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